1

Supporting young people
through vocational education,
training and employment

A submission to the Victorian Government’s
VET Funding Review

April 2015

About YACVic

The Youth Affairs Council of Victoria Inc. (YACVic) is the peak body and leading policy advocate on young people's issues in Victoria. Our vision is for a Victorian community that values and provides opportunity, participation, justice and equity for all young people. We are an independent, not-for-profit organisation.

Youth Affairs Council of Victoria

Level 2, 180 Flinders St

Melbourne, VIC 3000

T: (03) 9267 3722

E:

Contents

The VET Funding Review and Young People 4

Why focus on young people? 4

Engaging with young people 6

Recent changes in the VET sector 7

Young people and VET affordability 10

Early school leavers 11

Place of residence, and gender 12

Addressing gender disparities 15

Koorie young people and VET 16

Refugee and migrant young people and VET 17

Recommendations 19

The VET Funding Review and Young People

The Youth Affairs Council of Victoria (YACVic) is Victoria’s state peak body for young people aged 12-25 and the services that support them. We are a vibrant, member based organisation, with 311 members – approximately half of them young people, the others comprising local governments, community and health services and research bodies, all committed to improving wellbeing, participation and equality for young people.

YACVic welcomes the Government’s decision to review Victoria’s vocational education and training (VET) sector, to consider how it might work better to ensure that more Victorians can become work-ready, and can access high quality training opportunities.

We particularly welcome the emphasis in the review’s terms of reference on quality and stability of training; rural and regional access;ensuring student costs are not a barrier to participation; and supporting vulnerable and high-needs learners to complete training and transition to employment. These are key issues affecting young people, and were discussed in our 2013 report Vocational Education and Training (VET) and young Victorian: a way forward.

Why focus on young people?

VET providesa significant pathway for young people, as they prepare to leave school, develop employment skills, and plan their careers. In 2014, young people aged15-24 made up 40% of Victorians undertaking government-subsidised VET: around 178,439 young people.[1]

However, engagement in VET is waning. Since 2012, the number of Victorians taking part in VET has declined, and the biggest decline was amongst those aged 15-19. Between 2013-14,this student group shrank by 18%.[2]

Unfortunately, young people are disproportionately vulnerable to both unemployment and unstable or casualised employment. In January 2015, 16.5% of young Victorians aged 15-19 who were not in full-time education were unemployed and looking for full-time work.[3](This figure does not capture those seeking part-time work, or those not in the labour force at all.)

Victoria has an ageing population; around one in four Victorians is expected to be aged over 65 in 2050, by which time workforce participation is projected to decline to around 56%. Our community’s future prosperity will demand on strong labour force engagement, but at present many young Victorians are not fully engaged in training, education or employment.[4]

A strong, well-supported VET sector plays a vital role in assisting young people, notably those who want, or need, an alternative to academic schooling, and those facing disadvantage. VET can prepare young people for the workplace, connect employers and future workers, and boost literacy, numeracy and generalist skills.

In this submission, we call for VET pathways which are high quality, affordable, and valuable in helping young people transition into meaningful, sustainable employment – especially young people who are facing disadvantage.

A set of recommendations is included, aligned with the VET Funding Review’s Terms of Reference.

Engaging with young people

We understand the VET Funding Review will include consultations with TAFE institutes, private RTOs, industry representatives, peak bodies and employee associations. We urge that these consultations should also includeconsumers of VET. In particular, they should engage young people, who make up 40% of the VET student body in Victoria, and who are especially vulnerable to unemployment and other forms of disadvantage.

Engaging with young people would help this review to more fully understand their concerns and needs. Facilitating young people to come up with solutions to the problems in their lives helps to ensure fresh ideas and innovative approaches; it also buildsyoung people’s confidence, initiative, and sense of connectedness to community.

The timelines for this submission did not permit YACVic to undertake significant new consultations with young people about VET, although we did engage our Youth Reference Group. The concerns they highlighted about VET included:

  • Rising costs of VET.
  • Aggressive marketing campaigns by some registered training providers, using social media and Facebook advertising targeted at young people, free iPads, and instant online sign-ups where the conditions are unclear.
  • Fear of ‘dodgy’ providers and uncertainty about how to judge provider quality ahead of time.
  • Feeling pressured by teachers and especially employers to undertake particular VET courses, even if the courses do not align with a young person’s own aspirations. This is problematic because young people can only get subsidised access to two VET courses at the same qualification level, and must pay the full cost of any subsequent training themselves.

We would be delighted to work with you in the coming months to host youth consultations or surveys, to learn from young people’s insights about how the VET sector could change to deliver more positive and equitable outcomes for all young people.

-See Recommendation 5

Recent changes in the VET sector

In 2012, the previous Victorian Government announced a number of very significant changes to how the VET sector would be supported in Victoria. These included:

  • Removing caps on hourly fees for VET students, effectively enabling providers to set their own rates.
  • Removing funding to TAFEs for specific activities, such as regional provision, facilities maintenance and honouring of enterprise agreements.
  • Ensuring that all VET providers would receive the same subsidy rate. (Previously the TAFEs had received a higher hourly subsidy, in recognition of their greater delivery costs and community support role.)
  • Varying subsidy levels to different VET courses, in bands ranging from $2 to over $10 an hour, according to the assessed value of the course to the economy. Foundational and apprenticeship courses would attract higher subsidies, with lower subsidies for lower level certificates. Areas which would attract high subsidies included construction, mining, manufacturing, and agriculture, forestry and fishing. Those attracting the lowest subsidies included administrative and support services, financial and insurance services, rental, hiring and real estate services, and retail.
  • Changing the payment structure for concession card holders. Previously students with concession cards had been able to pay a small fixed fee; now they would pay a concessional rate of 20% of their course fees, up to Certificate IV level.
  • Tightening the practice of providing 1.3 loading (multiplied by the per hour course subsidy rate) for any person under 20 who did not have a Year 12 qualification. Now this loading would only apply to early school leavers under 20 who were also defined as being from low socio-economic status backgrounds.[5]

YACVic welcomed another decision taken at that time: to make ‘zero-fee’ training places available to young people exiting out-of-home care– a very positive step for a vulnerable group. However, the bulk of the changes to the VET system were regarded with concern, on the grounds that they were likely to make VET less accessible for many young people.

These new changes occurred on top of broader issues arising from the rapid increase of private VET providers, who are able to access contestable funding through the national training requirement, which guarantees Australians subsidised training at the registered provider of their choice. The side-effects of this arrangement were discussed in a recent report released from the Business School of the University of Sydney, prepared for the Australian Education Union:The Capture Of Public Wealth By The For-Profit VET Sector (2015). Key points of the report include:

  • TAFEs and other public providers remain the main ‘go to’ for vocational training for students at risk of disadvantage, including early school-leavers, regional students, Aboriginal students, and students with a disability.
  • While government funding to non-TAFE providers has grown rapidly in recent years, spending on VET delivery per hour has dropped. Victorian Government spending per hour dropped by 20% between 2002-2012.
  • There has been a significant transfer of public wealth to for-profit providers, which make approximately 30 cents of profit for every dollar of public subsidies received. In Victoria, training subsidies generated approximately $600 million in private profits between 2011-13.
  • Regulators have not adequately addressed the unscrupulous practices of some RTOs, such as subcontracting delivery of training to unregistered providers; channelling students into different courses to what they originally wanted (to attract higher subsidies); allowing students to do their qualification in less than a quarter of the nominal duration of a course; and luring students with incentives like free iPads. Students have few means of assessing the quality of providers ahead of time, and can be vulnerable to aggressive marketing.
  • The availability of VET FEE-HELP loans has encouraged some providers to sign up students to loans they may have little chance of repaying, if they end up working in low-paid areas such as aged care, childcare, or retail. The removal of the requirement that RTOs have a credit transfer arrangement with a higher education provider has had the effect of weakening quality control.[6]

- See Recommendations 4 and 8

In addition to these changes, young Victorians who are facing disadvantage have also been affected by the loss of some particular programs which previously helped them to become work-ready and engage better with training, education and employment.

One damaging development was the federal government’s decision to cease funding the Youth Connections program.Youth Connections had been funded under the COAG National Partnership Agreement on Youth Attainment and Transitions, and was successful in addressing the disengagement of school-aged young people from education, training and employment. The program used to support around 4,600 vulnerable young Victorians each year. A study of one Victorian Youth Connections region by the Brotherhood of St Laurence found that almost three-quarters of the young participants were still engaged with education three months after exiting the program. Another study conducted by Dandolo Partners found that, where circumstances were known, the majority of young people who completed Youth Connections were still engaged with training, education and / or employment six months later.[7]

The strengths of Youth Connections included its community-based case-management approach, program flexibility, independence from schools (which helped to build trust with young people), and capacity to provide intensive support and outreach to the most vulnerable young people. Since the program ceased, local governments are reporting a significant rise in demand for youth case management, in areas including mental health, homelessness, financial hardship and disengagement from school. The loss of Youth Connections has been felt especially keenly in rural and regional communities, which have fewer, if any, other options for alternative education or youth support.

-See Recommendation 2

An older cohort of vulnerable young people were also affected by the previous Victorian Government’s decision to cease funding ‘work-ready’ pre-employment and training programs for young people aged 17-24 who were facing significant barriers to employment, such as mental illness, family breakdown, young parenting, or involvement in the justice system. Before June 2013, the Department of Business and Innovation funded several such programs, run through youth organisations such as Whitelion and the YMCA. These programs helped young adults to develop job-ready skills; linked them to supports in areas like training, housing and health; worked with businesses to secure work placements for them; and helped employers to understand what approaches were needed to keep these young people in their jobs. Under the previous government, funding to these important programs was allowed to lapse.

-See Recommendation 3

Throughout these challenging times, an important role was played by the Local Learning and Employment Networks (LLENs), partnership brokerage bodies which take a place-based approach to tackling youth educational engagement and pathways to work. The LLENs identify local service gaps and bring together trainers, employers, schools and communities to find local solutions to youth unemployment. They work with thousands of organisations and businesses across the state and are widely recognised as the main partnership brokers in the youth employment space. YACVic welcomed the current Victorian Government’s commitment of $32 million to continue the work of the LLENs for four years, but the withdrawal of federal government funding to the LLENs has meant that their capacity to do their valuable work has still been seriously reduced.

-See Recommendation 7

Young people and VET affordability

Young people, particularly those facing disadvantage, tend to have lower than average incomes, making them especially vulnerable to cost changes, such as the removal of course caps and flat concession fees. The ‘banding’ system also has implications for young people, as it tends to direct funding away from junior levels of VET, where young people make up a high proportion of the students.

Young people should not become stuck in cycles of junior level study without strong career prospects at the end. However, this does not mean that junior courses should simply be reduced in favour of Certificate IV and above. Traditionally VET has functioned as a pathway for many young people whose learning difficulties were not dealt with adequately in school. Certificate I-III programs, if well delivered, can play an important role in re-engaging young people who may not yet have the skills or capacity to study at a more senior level. For students facing serious disadvantage, re-engagement with education and training can be a positive outcome in itself.

Early school leavers

For young people who leave school without a Year 12 qualification, VET pathways can be crucial. In 2013, the Victorian Curriculum Assessment Authority identified that 16,855 young people had left school without a Year 12 qualification.[8] Unfortunately young people engaged in VET outside of schools cannot access the sort of wrap-around supports that are available to their peers who are still in school (especially since TAFE cuts led to the reduction of student support services), although this cohort may need support the most.

This cohort of young people is also disproportionately vulnerable to unemployment. In 2014, 17% of early school leavers in Victoria were unemployed and looking for work six months after leaving school, compared to 5% of school leavers who had a Year 12 qualification.[9]

In light of this, it is concerning that enrolments in government-subsidised VET at Certificate II level and above by young people aged 15-19 who do nothave a Year 12 qualification declined during 2013-14, to levels lower than they had been since 2009.[10]

- See Recommendations 1, 8 and 9

Place of residence, and gender

While early school leavers are a critical VET cohort across the board, young people’s engagement in VET (and their risk of disadvantage) also vary greatly according to their gender, income, and where they live.

Historically, VET pathways have been especially important for young people from lower-income communities, and from rural and regional communities. Additionally, young women and young men tend to engage in VET in different ways. In some respects, the uptake of VET could be said to mirror broader patterns of privilege and disadvantage, with traineeships and Certificate I-III study (which tend to lead to lower-paid and less secure work) associated with lower income communities, rural communities, and young women.

VET pathways are crucial in rural communities – in 2013, for example, approximately 31% of Victorian VET students were based outside of major cities.[11]LLEN data from 2013 showed that, in proportional terms, the top 10 catchment areas where Year 12 graduates went on to apprenticeships or traineeships were all rural or regional. The same was true of early school leavers, with the exception of one region (Banyule Nillumbik).[12]

However, rural and regional engagement in VET appears to be declining. Between 2012-14, publically subsidised VET enrolments in rural / regional Victoria appeared to drop by almost 22%, compared to a 13% drop in Melbourne.[13]

This drop in rural and regional participation is likely down to several factors. The rise in fees for some VET courses presumably played a part; rural and regional young people and their families are at greater risk of financial disadvantage than their metropolitan peers, and so are less likely to be able to afford high educational costs. The median income for families with adolescent children (both dual- and single-parent families) is lower in rural Victoria than the state average.[14]